Investment Securities (Tables)

3 Months Ended

Mar. 31, 2015

Amortized Cost and Fair Values of Securities

The amortized costs and approximate fair values, together with gross unrealized gains and losses on securities, are as follows:



	March 31, 2015
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for Sale Securities
Mortgage-backed securities
Government-sponsored agencies	$	111,487	$	3,073	$	(23)	$	114,537
Collateralized mortgage obligations
Government-sponsored agencies		91,280		1,346		(427)		92,199
Municipal obligations		38,150		2,180		(96)		40,234
Corporate obligations		21,770		69		(1,306)		20,533
Total investment securities	$	262,687	$	6,668	$	(1,852)	$	267,503



	December 31, 2014
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for Sale Securities
Mortgage-backed securities
Government-sponsored agencies	$	110,452	$	2,927	$	(89)	$	113,290
Collateralized mortgage obligations
Government-sponsored agencies		97,325		1,270		(836)		97,759
Federal agencies		4		-		-		4
Municipal obligations		27,246		2,013		(7)		29,252
Corporate obligations		21,763		44		(1,306)		20,501
Total investment securities	$	256,790	$	6,254	$	(2,238)	$	260,806

Amortized Cost and Fair Value of Available for Sale Securities by Contractual Maturity



	Available for Sale
Description Securities	Amortized Cost		Fair Value
Security obligations due
One to five years	$	14,618	$	14,670
Five to ten years		6,493		6,698
After ten years		38,809		39,399
		59,920		60,767
Mortgage-backed securities
Government-sponsored agencies		111,487		114,537
Collateralized mortgage obligations
Government-sponsored agencies		91,280		92,199
Totals	$	262,687	$	267,503

Investments Gross Unrealized Losses and Fair Value in Continuous Unrealized Loss Position

The following tables show the gross unrealized losses and fair value of the Company’s investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014:



	March 31, 2015
	Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale
Mortgage-backed securities
Government-sponsored agencies	$	18,351	$	(23)	$	-	$	-	$	18,351	$	(23)
Collateralized mortgage obligations
Government-sponsored agencies		11,688		(26)		26,540		(401)		38,228		(427)
Municipal obligations		5,592		(92)		634		(4)		6,226		(96)
Corporate obligations		-		-		6,996		(1,306)		6,996		(1,306)
Total temporarily impaired securities	$	35,631	$	(141)	$	34,170	$	(1,711)	$	69,801	$	(1,852)



	December 31, 2014
	Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for Sale
Mortgage-backed securities
Government-sponsored agencies	$	1,069	$	(9)	$	19,580	$	(80)	$	20,649	$	(89)
Collateralized mortgage obligations
Government-sponsored agencies		5,075		(40)		34,159		(796)	$	39,234	$	(836)
Municipal obligations		-		-		631		(7)		631		(7)
Corporate obligations		-		-		6,995		(1,306)		6,995		(1,306)
Total temporarily impaired securities	$	6,144	$	(49)	$	61,365	$	(2,189)	$	67,509	$	(2,238)

Debt Securities for which Credit Loss was Recognized in Income and Other Losses Recorded in Other Comprehensive Income

The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income.



	Accumulated Credit Losses
	Three Months Ended
	March 31,
	2015		2014
Credit losses on debt securities held
Beginning of period	$	109	$	1,205
Reductions related to actual losses incurred		-		-
As of March 31,	$	109	$	1,205

Pooled Trust Preferred Collateralized Debt Obligations

The following table provides additional information related to the Bank’s investment in pooled trust preferred securities as of March 31, 2015:



Deal Name	Class	Original Par		Book Value		Fair Value		Unrealized gain (loss)		Realized Losses YTD		Lowest Current Rating	Number of Banks / Insurance Cos. Currently Performing	Total Number of Banks and Insurance Cos. In Issuance (Unique)	Actual Deferrals/ Defaults (as a % of original collateral)		Total Projected Defaults (as a % of performing collateral) (1)		Excess subordination (after taking into account best estimate of future deferrals/ defaults) (2)
	(Dollars in Thousands)
Alesco Preferred Funding IX	A2A		1,000		911		548		(363)		-	BB+	42	51	10.04	%	12.95	%	55.14	%
U.S. Capital Funding I	B1		3,000		2,891		1,974		(917)		-	B3	28	33	9.44	%	7.02	%	10.33	%
		$	4,000	$	3,802	$	2,522	$	(1,280)	$	-

(1) A 10% recovery is applied to all projected defaults by depository institutions. A 15% recovery is applied to all projected defaults by insurance companies. No recovery is applied to current defaults.

(2) Excess subordination represents the additional defaults in excess of both current and projected defaults that the CDO can absorb before the bond experiences any credit impairment. Excess subordinated percentage is calculated by (a) determining what percentage of defaults a deal can experience before the bond has credit impairment, and (b) subtracting from this default breakage percentage both total current and expected future default percentages.

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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